Chemical Stocks' Q2 Earnings Slated On Aug 5: KRO, NL, VHI

A few chemical companies are slated to report their quarterly results on Aug 5. The chemical industry is clawing its way back after being shaken by the global economic crisis. Chemical makers are benefiting from strategic measures including expansion into high-growth markets, aggressive cost management and productivity actions as well as acquisitions.

However, the industry faces certain roadblocks including a still weak agriculture market, weak demand in the energy space (given depressed oil prices) and slowdown in China.

As per the Zacks Industry classification, the chemical industry is grouped under the broader Basic Materials sector. Earnings for sector participants on the S&P 500 index that have unveiled their quarterly numbers thus far are down 5.9% from the same period last year while revenues have declined 10.1%, according to the latest Earnings Preview report.

The growth picture looks dull as the sector’s earnings are expected to drop 10.6% on a year-over-year basis in the second quarter, considering the companies that are yet to report. Revenues for the sector are likely to fall 7.6%.

We take a sneak peek into three chemical companies that are expected to report their second-quarter results on Aug 5.

Kronos Worldwide, Inc. (NYSE:KRO) has an Earnings ESP of +100% as the Most Accurate estimate stands at 6 cents while the Zacks Consensus Estimate is pegged at 3 cents. But the company carries a Zacks Rank #4 (Sell), which we caution against ahead of the earnings release. Kronos missed estimates in three of the trailing four quarters with an average negative surprise of 91.25%.

NL Industries Inc. (NYSE:NL) has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 5 cents. The company carries a favorable Zacks Rank #3 (Hold), but its 0.00% ESP makes surprise prediction difficult. NL Industries missed estimates in three of the last four quarters with an average negative surprise of 192.86%.

Valhi, Inc. (NYSE:VHI) has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 6 cents. The stock holds a Zacks Rank #3, but its 0.00% ESP makes surprise prediction difficult. Valhi missed estimates in three of the trailing four quarters with an average negative surprise of 123.21%.